Solar power industry seeks extension of waiver on interstate charges

New Delhi: The National Solar Energy Federation of India (NSEFI) has requested that the government extend the waiver of Inter-State Transmission System (ISTS) charges for renewable energy projects to aid India's ambitious energy transition goals.

Currently, the charges are waived for 25 years for green power projects such as solar, wind, and hybrid projects, and battery energy and pump storage projects commissioned before 30 June 2025.

In a recent letter to the power ministry, NSEFI has suggested that projects commissioned beyond June 2025 be considered for the waiver.

"We have written to the ministry continuously through the last 6 months about the matter requesting extension for at least 3 years until 2028,” Subrahmanyam Pulipaka, CEO, NSEFI told Mint. 

The solar energy body expects the pace of installation to accelerate so that around 80GW of renewable energy (RE) is commissioned over the next three years. The waiver will be key for achieving the target of 500 GW installed renewable energy capacity by 2030, Pulipaka added.

First introduced in 2010, the waiver has been amended and extended several times. The scope of the waiver has been widened to include new and emerging sectors such as green hydrogen, green ammonia projects, and offshore wind projects along with hydropower projects.

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Akshay Hiranandani, CEO Serentica Renewables, said the ISTS waiver has been critical for expansion of renewable energy capacity as it reduces the cost of delivered power, translating into lower tariffs for the end consumer.

"Considering that India is aiming for 500 GW of RE capacity by 2030 and we still are framing our collective journey to that number, it is important that the waiver is extended for at least two more years,” Hiranandani added.

At the present levels, the quantum of ISTS charges range from ₹0.80-1.20 per unit, which according to industry estimates is one-third of the solar tariff and one-fourth of hybrid (solar-wind) tariff.

Queries mailed to the power ministry remained unanswered till press time.

In its representation, the solar power developer body has said that while the government has set an ambitious target for realizing 500 GW of renewable energy installations by 2030, factors including covid, have delayed the commissioning timelines of transmission infrastructure significantly. Other factors delaying the projects include land acquisition, right of way (RoW) and permit issues.

It also noted that in order to deliver high capacity utilization factor (CUF) for hard-to-abate industries, wind-solar hybrid projects are being set up and the construction timeline for such hybrid or round the clock renewable energy projects is dependent upon the installed capacity and is stretched over two to three years. Hard-to-abate industries are difficult to decarbonize since their emissions of greenhouse gases can be hard to reduce, for instance sectors like shipping and aviation.

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According to NSEFI, the next six years are crucial for realizing India's ambitious renewable energy target and this waiver will help in ensuring a steady pace of installations to achieve the target.

It recommended that the ISTS waiver should be extended for all renewable energy projects including utility, hybrid, open access and green hydrogen.

The suggestions come at a time when the progress of transmission capacity addition has been slower than expected. In the first two months (April-May) of this fiscal, India added 391 circuit kilometres of transmission lines, against the addition of 1,004 circuit kilometers during the same period of the last financial year (FY24), showed data from the Central Electricity Authority.

Further, against the target of installing substations with a cumulative capacity of 9,580 Mega Volt Ampere (MVA), only 6,225 MVA has been installed.

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